Yesterday, officials from the Centers for Medicare and Medicaid Services (CMS) held a call with therapy stakeholder groups to describe their plans to implement the manual medical review process for the therapy cap exceptions that exceed $3,700 effective October 1. CMS has provided a fact sheet and question-and-answer document regarding the process and will issue a transmittal in the coming days. The therapy cap is an annual per-beneficiary limitation on services that applies to all outpatient therapy settings except critical-access hospitals.

Highlights regarding manual medical review include these:

KX modifier requirements still remain in place for therapy services that exceed $1,880.

For outpatient therapy services that exceed $3,700 an advanced approval process under which providers will be assigned to 1 of 3 distinct phases for manual medical review. CMS will notify providers by letter and contractor websites regarding which phase they are included in.* Phase I providers: Subject to manual medical review October 1-December 31.* Phase II providers: Subject to manual medical review November 1-December 31.* Phase III providers: Subject to manual medical review December 1-December 31.

Criteria for medical review will be based on current medical review standards. CMS will provide guidance and additional training for providers and Medicare Administrative Contractors (MACs) in the coming weeks.

MACs will have 10 business days to decide whether or not they will approve services that exceed $3,700. If the MAC does not respond to a provider within 10 business days, claims beyond the $3,700 threshold will be approved.

Advanced approval will allow an additional 20 treatment days beyond the $3,700 amount. Advanced approval does not guarantee payment. Retrospective review may still be performed.

If a provider does not request advanced approval prior to providing services over $3,700, payment for the claims will stop, and a request for medical records will be sent to the provider. The provider will be subject to prepayment review for those claims, and the time frame for review will be approximately 60 days.

Beneficiaries who have received $1,700 or more of therapy services in 2012 will receive letters in September 2012 providing them information about their potential financial liability for services over the therapy cap amount. An advanced beneficiary notice to beneficiaries is not required but is recommended as a way for the provider to convey information about the patient's potential financial responsibility for services above the therapy cap amount.

A special open door forum (ODF) teleconference on the manual medical review of therapy claims will be held August 7, 2 pm-3:30 pm, ET. Special open door participation instructions are below: